TrustWorks On Call: Operation Reverse Thrust

Behind the Headlines

Unpacking the forces driving healthcare's biggest stories.

1. RFK Jr. cancels $500M of mRNA vaccine contracts.

Last Tuesday, the Department of Health and Human Services (HHS) announced it was winding down 22 contracts with the Biomedical Advanced Research and Development Authority (BARDA) focused on mRNA vaccine development.
HHS Secretary Robert F. Kennedy Jr. justified the decision with a variety of false and baseless claims, such as that mRNA vaccines don’t protect against respiratory viruses, like COVID and the flu.
Last May, HHS also revoked a $600M contract with Moderna to develop a mRNA vaccine for avian flu.

TrustWorks Take: There is some cruel irony in how the game-changing breakthrough of mRNA vaccines for COVID, which should be credited as one of the greatest public health achievements ever funded by the US government, sparked a wave of anti-vaccine resentment that swept into power a few individuals committed to dismantling this progress. Reportedly, the man who opened fire on the Centers for Disease Control and Prevention headquarters last weekend was motivated by a belief that the COVID-19 vaccine had made him depressed and suicidal. Secretary Kennedy, who once called the COVID vaccine “the deadliest vaccine ever made” without credible evidence and despite it saving millions of lives, is as responsible for the proliferation of these kinds of anti-vaccine beliefs as any figure in America. It’s deeply concerning that someone with a long record of skepticism toward vaccines is now steering federal vaccine policy. The “Make America Healthy Again” movement speaks the language of patient and provider choice, yet the decision to cancel grants for future mRNA vaccine development based on claims at odds with established scientific consensus, suggests a narrower agenda. In practice, it seems less about protecting everyone’s freedom to choose, and more about protecting the freedom to reject science while limiting the freedom to accept it.

2. Payer strategies create turbulence for MA plans, ACA exchanges.

Across Q2 2025 financial reporting, payers including UnitedHealth, Elevance, Centene, and Molina lowered profit expectations and promised to reduce 2026 enrollment levels, after experiencing higher-than-expected utilization and medical costs, especially in their Medicare Advantage (MA) plans.
CVS-Aetna and Humana raised their profit expectations for the rest of 2025, citing their successful strategy to reduce plan offerings and cut enrollment in MA last year, whereas other payers, especially UnitedHealth Group (UHG), increased enrollment.
Payers have also submitted filings to state regulators with a median premium increase of 18 percent for Affordable Care Act (ACA) exchange plans in 2026, up from a 7 percent increase for 2025.

TrustWorks Take: Together, CVS-Aetna and Humana shed over 600K MA members since 2024, and their earnings and stock prices have been rewarded mightily for it. Now, the rest of the MA payers, like UHG which picked up many of those recently dropped members, are following suit by eschewing enrollment growth for margin control. In the already highly concentrated market for MA plans, patients will experience this retrenchment as a reduction in the availability of plans with $0 premiums or generous supplemental benefits. Although this is a problem, the ACA market appears to be on the verge of catastrophe. Average premium increases of 18 percent are a result of payers’ concerns around higher utilization and medical costs coinciding with the expiration of enhanced subsidies. These factors also play off each other through adverse selection, as some healthier people will forego insurance rather than paying for ACA plans without the enhanced subsidies, shifting the risk pool of ACA enrollees sicker and prompting payers to raise premiums even further. MA and the ACA exchanges have both enjoyed record enrollment and solid patient satisfaction scores in recent years, but regulatory changes and medical cost trends may change that. And not unlike the reverse thrust of mRNA progress, the tailwinds previously supporting the exchanges may soon shift and act as a drag.

3. UHG-Amedisys deal set to close after DOJ settlement.

On Thursday, the Department of Justice (DOJ) announced a proposed settlement to resolve its challenge of UHG’s planned acquisition of Amedisys for $3.3B, which has been on hold since January 2023.
To address antitrust concerns over UHG already owning home-care provider LHC Group, the settlement requires UHG and Amedisys, by some measures the largest home health care company in the US, to divest 164 home health and hospice locations across 19 states; Amedisys must also pay a $1.1M civil penalty for violating antitrust compliance law.

TrustWorks Take: Despite this settlement securing the record “largest divestiture of outpatient healthcare services to resolve a merger challenge,” UHG spending almost $9B over a few years to acquire two of the largest home health companies feels blatantly anticompetitive and monopolistic. However, this merger is likely to be completed under very different market conditions than when it was initiated. UHG’s reputation as unstoppable behemoth has faded amid its struggles with declining profitability, flagging investor confidence, and regulatory and Congressional scrutiny, including a recent Senate hearing investigating whether UHG may be using improper payments to keep MA patients out of hospitals. UHG’s ability to effectively leverage the additional scale unlocked by Amedisys could also be hamstrung by payment changes to the home health industry. Under the proposed 2026 Medicare payment rule, home health companies are set to receive a 6.4 percent pay cut, worth $1.1B in total, which has many companies exploring consolidation and service cutbacks. UHG can still use the Amedisys network to manage the costs of and control the care for a greater portion of its insured population, especially in MA, but it has less room than ever to translate these relationships into net earnings. Still, if recent history has taught us anything, it’s to not underestimate the ability of a deep-pocketed, vertically integrated giant to find new levers, especially when market headwinds threaten its core playbook.

Beyond the Whiteboard

Visualizing key trends from the healthcare industry

MA Headwinds Only to Grow from Here
In December 2023, the Wall Street Journal ran the headline, “The Medicare Gold Rush Is Slowing Down.” It followed this up one month later with, “It Is Going to Be a Bad Year (or More) for the Medicare Business.” Finally, last week we got the punchline: "Insurance Companies’ Medicare Pullback Is Here.” MA appears to be shifting from its rapid growth phase into a more mature and constrained market. Its enrollment and share of the Medicare population will likely keep rising for years, but the program’s economics, incentives, and experience are poised to tighten, leaving payers, providers, and patients with fewer gains to share.

For payers, medical costs driven by higher utilization are already hitting their bottom lines. Sooner than later, Congress and CMS are likely to get serious about payment reform such that MA actually saves money compared to traditional Medicare, as it was intended. And before long, Baby Boomers will be entering their “breakdown years,” the final years of life where healthcare expenditures are most highly concentrated. All the prior authorizations and utilization management tactics that have providers fed up with MA plans are likely to worsen as payers struggle to maintain margins for an increasingly expensive, decreasingly capitated population of aging seniors. Patients, for their part, will first feel the sting of losing access to $0 premiums, supplemental benefits, and relatively broader networks that enticed them to sign up for MA plans. Then, should they ever get frustrated with their increasingly limited-network MA plan as their health needs grow, they’ll discover that they missed their six-month window to sign up for Medigap upon turning 65, meaning they’d face significant cost-exposure by switching over to traditional Medicare. If and when we find these stressors plaguing our seniors, their providers, and the MA payers, we may look back and realize we took what was a well-regarded Medicare program and managed to ruin it for everyone.

Dialing In

Sharing insights from our work with clients

Treating Partnerships Like Investments
I recently shared a table with the venture-capital arm of a forward-thinking health system, where we found ourselves comparing notes on what makes for a good partnership. As it turned out, the positive attributes we identified for partnerships closely mirrored what this team would demand of healthcare startups when deploying venture capital.

At the heart of their overlap is a shared mindset that partnerships and investments should be built around real-world impact. Venture capitalists are more likely to hear pitches for “disruption,” while health system partners may prefer the word “transformation,” but what matters in either case is that the solution rests on more than just theoretical potential. It should meet clear needs, scale effectively, and present apparent utility to clinicians or operators who will eventually be its champions.

Perhaps most critically, we agreed that the health system should prioritize alignment of mission and economic incentives to mutual benefit. Whether it’s improving patient outcomes, optimizing workflows, or addressing workforce shortages, the partnerships that thrive are those where the mission is aligned, and both values and financial stakes are shared.

Implicit to our discussion was a growing intolerance for passive, one-sided relationships. Health systems are done being used as distribution channels or pilot sites for ideas not yet grounded in clinical reality. Instead, anyone looking to partner with health systems must bring to the table an applied understanding of real operational problems, an ability to co-develop or adapt solutions, a team that can work hand-in-hand with clinical and administrative leaders, and a model for shared incentives, where both mission and margin matter. At the same time, health systems must do their part to bring clarity on strategic priorities, operational commitment, and a willingness to invest the resources required to make the work succeed. Only when both sides contribute meaningfully to sharing risk, responsibility, and reward does it move from a transaction to a true partnership.

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